What is demand in Economics?

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In Economics demand shows the relationship between the prices of a commodity and the quantity of the commodity which the consumer wants to buy at those prices. Demand in Economics is essentially the attitude and reaction of a consumer towards the commodity he wants to buy. Mere desire or wants for a commodity does not constitute demand in Economics.

The desire for a commodity backed by ability and willingness to pay is said to be true demand or effective demand in Economics. A poor beggar who hardly makes both ends meet may wish to have a car but his wish or desire will not constitute demand for car as he can’t afford to pay for it although he has desire and willingness to pay.

Thus three things are essential for a desire for a commodity to become effective demand- (1) desire for a .commodity, (2) willingness to pay (3) ability to pay for the commodity.

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Demand is meaningless without reference to price and time. The amount demanded must refer to some period of time viz. a year, a month or a week. Demand is expressed with reference to a particular point of time. Likewise demand is always at a price. It means the amount demanded bought at particular going price. The desire without price is not demand in Economics.

Precisely states the demand for a commodity is-the quantity of if that a consumer will buy at various given prices at a given moment of time. Benham states “the demand for anything at given price is the amount of it which will be bought per unit of time at that rice”.

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